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My 91 year old mother who I live with as her 24/7 caregiver…

My 91 year old mother...
My 91 year old mother who I live with as her 24/7 caregiver has two Revocable Trusts for my brother and I. Both my brother and I are disabled and have been for over 10 years on SSDI. The money in the trusts are set up as follows: Account 1: My Mom's name In Trust For My name. Account 2: My mother's name In Trust For My Brother's Name. These accounts we were always told were for our benefit to make sure we could take care of ourselves.I am 58 years old (01/03/1960)
My Brother is 65 years old (02/20/1953)We'd like to take the money out of the revocable trusts and deposit it in accounts for my brother and I per the Penalty Exemption for Transferring Money to Handicapped children. We want it directly into our accounts and not in a trust and it appears the law allows this without penalty.I understand my SSDI Benefits will not be affected. I'm not sure of the Medicare benefits.I also know my MaHealth Standard WILL be affected but, I believe, ONLY in the month I receive the benefits since it will put me over my income limit for that month. However, MaHealth doesn't have an Asset Test for individuals under 65 who are disabled. My brother doesn't live in MA....So, my actual question is as follows: Is there anything I have to do or paperwork to fill out to transfer $32,000 from the Trust in Mom and I's names to my bank account and the same thing for my brother. OR, do we just move the money?I know I have to notify Mass Health and I'll lose bennies for that month. But do I have to notify anyone else or simply transfer the funds??
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Answered in 20 minutes by:
3/20/2018
Gerald, Esq
Gerald, Esq, Attorney
Category: Tax
Satisfied Customers: 5,103
Experience: Over 30 years of experience.
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Hello,
Thank you for using Just Answer. Please bear with me while I review your question. I will respond fully shortly. Thank you for your patience.

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Hello:

Thank you for your patience. This is a revocable Trust, which means it can be terminated at the discretion of the settlor. It also can be liquidated at the discretion of the Trustee if the liquidation will further the intent of the Trust. This is a decsion to be made by the Trustee. Since it is a discretionary decision it is not subject to challenge. Since you are the benficiary I assume you would not challenge it anyway.

All that needs to occur is that the funds in the trust account be transferred out of the trust and into the beneficiary's account. This can be don by having a check drawn on the Trust account or simply by making a transfer.

Because the amount is over $10,000.00 the bank will review the trnasfer due to certain federal rules on tansactions over $10,000.00. So there could be a delay of a day or so before the recipient bank will process the transfer.

Good luck.

Please note: Information is educational and not given as legal advice. Only your local attorney can give legal advice. I can't establish or accept an attorney-client relationship with you. All posts are available for public viewing.

Kind regards,

Gerald

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Gerald, Esq
Gerald, Esq, Attorney
Category: Tax
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Once the trust accounts are closed you may wish to prepare the following document just to terminate the Trust properly. This is just for record keeping purposes in case there is an IRS inquiry about a Trust tax return.

https://nolonow.nolo.com/noe/modules/livtrust/resources/lm/livtrust_lm_20_c.html

Kind regards,

Gerald

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Customer reply replied 1 month ago
Thank you so much. Just to be sure I have this right, I basically get together with my Brother (Oh, I am my Mom's Power of Attorney too if that helps) and transfer money into my account from the Revocable Trust in My Mother and I's name and then authorize the Trust in my Mom and Brother's name to be closed and transferred to his account. That's basically it? I assume there is not "Gift Tax" either in this event? Then I just notify MaHealth and have my Healthcare shut off for 1 month (or the remainder of the month I receive the money in). At that point, everything is done?

Yes. You have this correct.

There is a gift tax exemption of $15,000.00 per year and a lifetime exemption of $11,200,000.00. So that should nit have any affect on the transfer.

Otherwise you have this correct.

Kind regards,

Gerald

(Please do not forget to rate me – click the five stars. It adds nothing additional to your costs, but it helps me greatly. Plus it is good Karma for you. Thank you.)

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